SINGAPORE — Tech firm Grab’s proposed takeover of Trans-cab could affect how drivers employed by the taxi operator use other ride-hailing platforms, Singapore’s competition watchdog said on Monday (Oct 16).
The Competition and Consumer Commission of Singapore (CCCS) added that this may in turn “raise barriers to expansion and entry” for rival platforms, given the importance of scale in the industry.
These concerns, which were flagged as part of feedback from industry figures, are notwithstanding the fact that under Singapore’s point-to-point transport regulatory framework, licensed ride-hail operators are not allowed to impose exclusive arrangements preventing their drivers from using other platforms.
If the merger — first announced in July — goes through, Grab’s private-hire car rental arm Grab Rentals will acquire 100 per cent of shares in Trans-cab, Singapore’s third-largest taxi operator with a fleet of more than 2,500 vehicles.
Both parties expect the deal to close in the fourth quarter of 2023, subject to regulatory approvals and other customary closing conditions.
CCCS — a statutory board under the Ministry of Trade and Industry — had sought public feedback in August on how the move could affect the price, quality and quantity of street- and ride-hailing services by taxi and private-hire car drivers, among other aspects.
Grab and Trans-cab have argued that the acquisition will not result in a substantial lessening of competition, citing “minimal overlaps” between them; a lack of prohibitive barriers to entry; and a highly fragmented and competitive rental market.
On Monday, CCCS said in a media release that upon completion of an initial review, it was “unable to conclude” that the proposed acquisition would not give rise to any competition concerns.
It has since flagged raised these concerns with Grab and Trans-cab, and will “review the competition effects of the proposed acquisition in greater detail”.
At this juncture, the two parties may offer what CCCS called “commitments”, to address the potential competition concerns around their merger. These refer to measures to remedy, mitigate or prevent the substantial lessening of competition or any adverse effect arising from the deal.
Otherwise, the watchdog will proceed to a more in-depth review of the proposed acquisition.
Grab’s planned acquisition of Trans-cab follows the merger of Strides Taxi and Premier Taxis in May to form Singapore’s second-largest taxi operator.
In 2018, CCCS fined Grab and ride-hailing platform Uber S$13 million over their merger. The deal led to a substantial lessening of competition in the market, the watchdog said then, highlighting Grab’s increased prices and changes to its loyalty programme after it bought over Uber’s Southeast Asia operations. CNA
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